On a Statement of Cash Flows, Collections of Accounts Receivables

question 19

Multiple Choice

On a statement of cash flows, collections of accounts receivables are classified as:

• A) an operating activity.
• B) an investing activity.
• C) a financing activity.
• D) none of the above.

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Definitions:

Cash Flows

The net amount of cash and cash-equivalents moving into and out of a business.

Today's Dollars

Today's Dollars refers to the value of money in terms of the present day's purchasing power, often used to account for inflation in financial calculations.

Profitability Index

A calculation that measures the ratio between the present value of future cash flows to the initial investment, used to assess the profitability of an investment.

IRR

The discount rate at which the net present value of all the cash flows from a project or investment equals zero.